By Quantative Financial Analytics
Daily trading volume in currency futures spiked at the end of trading on December 20, 2016 as investors and hedgers and speculators rushed to beat a possible price increase which has characterized the behaviour of the Central Bank of Nigeria (CBN) at the expiration of any futures.
It was gathered that $68.02 million worth of notional was traded on December 20.
The last time daily activity hit the sixties was on November 30, when $82.88 notional amount was traded.
With that heavy volume, activities in December now stands at $200.8 million.
This is however a far cry from the $632.58 million notionals traded in the prior month. Nine out of the 12 outstanding futures recorded an activity. The total outsizing notional for currency futures in Nigeria now stands at $3.966 trillion.
FX Currency futures market has been active in Nigeria since being introduced in June 2016 but it is not clear if it has played any part to stabilize the Naira/Dollar exchange rate.
Since inception, 5 currency futures have matured and settled accordingly with the CBN paying out billions of Naira in the process.
Adedapo Adesanya